Question

why do we use average is there any limitation to their use?illustrate with example

Answer 1

Average income is the total income of the particular country.

Yes,there are limitations to average income:
1.It does not tell about the distribution of income in the country.
2.It does not indicate long term sustainable  as well as non renewable resources are liable to be exhausted.
3.It does not tell the correct income of the country as in the country there are rich as well as poors and their income varies.

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Answer 2

We use averages because they are useful for comparing differing quantities of the same category.

For example, to compute the per capita income of a country, averages have to be used because there are differences in the incomes of diverse people. However, there are limitations to the use of averages. This does not show the distribution of thing between people. For an example, suppose in a country, the annual income of a rickshaw puller is Rs 8,000 while an MNC employee earns an annual package of Rs 12,00,000. The average income of this country, therefore, will be Rs 6,05,000. Here actual income or status remains unknown. One can clearly consider this as a rich country thereby ignoring the income disparity between two individuals. Averages are useful for comparison, they also hide disparities.